Transnational Organized Crime

Introduction
We often start any approach to political science with a definition. As is typical, we don’t really have a definition for transnational organized crime (TOC). We kind of know it when we see it because it contains a few common elements (Stoica, 2016):

Perpetrators: the perpetrators of transnational organized crime are organized across national borders (physically or virtually)
Object: the perpetrator of transnational organized crime is using illegal means (illicit goods or licit goods in an illegal manner)
Subject: the perpetrators of transnational organized crime are foreigners (not citizens of the country — or countries — in which they operate)
Motive: “the motive of organized crime consists in gaining profit from illicit activities” (Stoica 2016, “Definitions”).
Communication: transnational organized criminals can use electronic messages to destroy, attack, or rob financial institutes.
Thus, the typical definition of TOC is that it is not merely local. TOCs work at a regional or global level; relatedly the TOC has trans-border connections. As a result, a TOC confronts national and international authorities (Stoica, 2016). They work because they are highly organized, well planned, tightly networked, process oriented, and well managed with strong leadership. That’s the value-added part beyond the profit motive and criminal enterprise (Bergeron, 2013). Indeed, we should view TOCs as we would any other business model.

Transnational Organized Criminal Networks

Most criminals operate on a small local scale where their actions are constrained by space and time. Organized criminals operate within the secret structure of broad criminal organizations which today are not bound by borders. Their trade includes human trafficking, narcotics trafficking, cyber crime, and weapons transfer. Their members are recruited from local populations where family or tribal loyalties may be the prerequisite for membership as the crime lords may threaten families if their recruits betray the organization.

Although we might think of global crime as victimless, economic crimes, Transnational Organized Crime is anything but that. The numbers are simply staggering. As of 2016, the global haul from TOC activity is 1.6 to 2.2 trillion dollars yearly based on 11 illicit industries: counterfeiting, drug trafficking, illegal logging, human trafficking, illegal mining, illegal, unreported, and unregulated (IUU) fishing, illegal wildlife trade, crude oil theft, small arms and light weapons trafficking, organ trafficking, and trafficking in cultural property (May, 2017).

International crime is about 1.5% of global GDP (McCarthy, 2016). TOCs deal in vast sums of unreported money. Such vast sums can easily impact governance by the buying of officials that allows the growth of corruption. In turn, the resultant impact can undermine a nation’s social and political fabric – as well as having possible adverse economic impacts.

Combatting Transnational Organized Crime

Combatting organized crime at the system level or international level would prompt many to think of the military. Can we fight organized crime with a military? Well, dismantling enemy networks, not employing heavy tanks and aircraft carriers, is the key to waging war against a modern, decentralized enemy (Arquilla and Ronfeldt, 2001). Is the United States military behind the curve? Arquilla believes so. “Big ships, big guns, and big battalions are sure to be the wrong approach to waging the wars of the future” (Arquilla, 2010).

So, how to get ahead of the curve? Networking. Answer networked enemies with networked solutions. In other words, the military needs to get smaller and more focused to fight an enemy like TOC. Arquilla argues: 1. “many and small beats few and large.” 2. “finding matters more than flanking.” 3. “swarming is the new surging” (Arquilla, 2010).

But what about other law enforcement agencies? How do they combat transnational organized crime? As globalization has encouraged an increase in international commerce, criminals have taken advantage of the integrated financial systems to hide smuggling activity. They also target failing states to find cover for illicit business (Bjelopera and Finklea, 2012). The key to the changing threat is their networked operations. Traditional law enforcement can be challenged by this structure because of its hydra like tendencies. Even decapitating the leader of a TOC may not have an effect when the criminal groups are moving away from hierarchical, vertical structures (May, 2017). Thus, sharing of intelligence, techniques, and best practices could make local law enforcement more effective.

Another effect of traditional law enforcement is to segment the counter-strategies into specific businesses, like human smuggling v. arms sales. Transnational organized crime in the 21st century is interacting on all fronts to follow the best business practices of international conglomerates including open innovation strategies, diversification, strategic vision, efficiency, and specialized markets. To combat these leading edge improvements, law enforcement needs to follow them too.

At the federal level, the White House released in 2011 a specific Strategy to Combat Transnational Organized Crime. It identified six key actions:

Start at Home: Taking Shared Responsibility for Transnational Organized Crime
Enhance Intelligence and Information Sharing
Protect the Financial System and Strategic Markets against Transnational Organized Crime
Strengthen Interdiction, Investigations, and Prosecutions
Disrupt Drug Trafficking and Its Facilitation of Other Transnational Threats
Build International Capacity, Cooperation, and Partnerships (Obama, 2011).
Funding (and Defunding) the Networks of Transnational Organized Crime

Organized crime groups are more entrepreneurial and market focused than before in the hyper-globalized and connected word that we see in the 21st century (Bjelopera and Finklea, 2012). Modern networks thrive on the absence of governance, and even in sophisticated technological states, there are loopholes and places to hide (Wagley, 2006).

Traditionally, criminal organizations had specific geographic boundaries. This supported a sense of nationalism within the crime group, but new organizations are missing that nationalist component, and are willing to work anywhere. So, to attack these non-geographic funding streams, solutions focus on criminal policies, regulatory policies, intelligence sharing, international cooperation, international agreements, and prevention techniques. Heavily regulated areas of the law make some options “crime proof” (Calderoni, 2015). Deterrence, freezing assets, and applying sanctions along with risk analysis and crime mapping can work on transnational crimes, but only if policy makers work together.

Terrorism and Transnational Organized Crime

Terrorism and transnational organized crime overlap in a crime-terror nexus. Evidence shows that terrorist groups and TOC groups have cooperated in support operations, shared tactics, and conspired on illicit funding sources in falling states and well established states. It is a “marriage of convenience” despite their differing goals (Makarenko and Mesquita, 2014). They have been allies (some short term, some not) in Latin America, the Middle East, Southeast Asia, and Europe. For example, Dawood Ibrahim’s D Company is a one-stop shop for criminal activity to fund terrorism. D-Company operates mostly in Pakistan, India, and the UAE. It is a “Specially Designated Global Terrorist” under US Executive Order 13224. Ibrahim started as a low-level smuggler in the 1970s, but he was incensed by the 1992 riots in India which killed hundreds of Muslims. Thereafter, he worked for terrorist groups: Lashkar-e-Tayyiba and Al Qaeda (Rollins, Wyler, and Rosen, 2010).

The Revolutionary Armed Forces of Columbia (FARC) is one of the longest running rebel groups in the world. Although designated as terrorists by the US, they are also well known for their criminal activities; indeed, they are among the richest guerrilla movements in the world. Columbia is one of the largest producers of cocaine in the world; the FARC taxed drug suppliers and oversaw large plantations of coca. Starting as armed farmers, they turned themselves into logistical experts, controlling transportation, supplies, and huge swaths of the country. FARC governed upwards of 50% of the country at its height in 2002. They also support themselves through extortion and kidnapping. No one was safe, not drug traffickers, corporate employees, or Government military officers (Leech, 2011).

Terrorists and criminals exploit ungoverned spaces, both digital and physical. Terrorists fundraise through crime, find material and logistics support, launder money, exploit corruption, and smuggle supplies, just to name a few of the overlapping needs between terrorists and TOC groups.

Debate over the function of this nexus continues because their goals are so different. Although both groups exploit law enforcement gaps, terrorists have a primarily political goal (NIC, 2004). The classic definition of a terrorist is a group or individual who wants some political change but cannot or will not go through legal channels. Thus, they seek to encourage fear among citizens with seemingly random violent acts hoping that the population will appeal to the political leaders for the change.

Remember, the classic definition of TOC is a group of people organized across borders with the objective of committing crimes for their material benefit. So, the common elements are the groups, and perhaps the cross border aspect. For the terrorist, though, the material gain is only the start. It will be used for some other political purpose. For the TOC member, the political purpose is not the primary one even if these criminals can exploit a chaotic or ungoverned political situation.

Legal Conventions

International crime exists in a world of states, but it ignores the state borders. Law enforcement does not. “Organized crime challenges the state’s monopoly on the use of force” (Bergeron, 2013, 8). States and Intergovernmental Organizations (IGOs) are paying attention. In addition to national laws, a few International conventions and laws have been passed to try to stem the tide of transnational organized crime. A few follow:

United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (1988) — http://www.unodc.org/unodc/en/treaties/illicit-trafficking.html
United Nations Convention Against Transnational Organized Crime (2004) — See https://www.unodc.org/documents/treaties/UNTOC/Publications/TOC%20Convention/TOCebook-e.pdf
United Nations Convention Against Corruption (2004) — See http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf
Narco-Crime

Narco-crime is a lucrative funding stream for transnational organized crime, and drug trafficking across international borders is a growing problem around the world. In 2016, roughly 5.6 percent of the global population aged 15-64 used drugs at least once, and the production of opium is at its highest level since the United Nations started collecting data (UNODC, 2018). When the demand for illicit drugs grows, the drug trade grows. With it comes illegal border trafficking, smuggling and theft, extortion and kidnapping, weapons trafficking, local street taxation, narcoterrorism and violence, narco-corruption and other government disfunctions, and a strengthening of drug cartels.

Drugs fuel gangs into powerful criminal businesses, including the Sinaloa cartel in Mexico, the Yamaguchi-gumi in Japan, the Solntsevskaya Brava in Russia, the Ndrangheta in Italy, and the Abergil Family in Israel. Gangs use fear and violence to increase their power and funding. As drug cartels grow, they become like an infection in their host state. The diseased state will encourage weak institutions and decreased (perhaps forever) sovereignty (Bunker, 2010). Globalization ensures that this virus will cross borders from Latin America to Africa to Europe. A new generation of drug trafficking organizations will be pro-active, expand, and encourage all measures used to stem the flow of drugs, including corruption. The rule of law and the stability necessary for development may not grow strong enough to withstand these new drug trades (Bybee, 2012).

Identity Theft

Organized crime is also responsible for the marked increase in identity theft. We all probably know someone who has either fallen victim to it or had a bank account or credit card compromised by these shadowy TOCs. Indeed, there were 16.7 million victims of identity fraud in 2017 (Pascual, Marchini, and Miller 2018). The complexity of the identity fraud schemes point to sophisticated criminals who have a network of international experts behind them.

Although the money is usually written off for the victim, it is a hidden cost of doing business. In turn this drives up insurance costs and even interest rates to cover the losses that are written off by the card issuer. Thus, the impact of hidden crimes like this are hard to see, but definitely far reaching. Further, that money is now money that is available to the TOC. As an integral part of TOCs, it is now estimated that between $1.3 and $3.3 trillion of their illicit profits are laundered through the legitimate global financial system. That’s between 2 and 5 percent of world GDP (Obama, 2011).

Global Crime/Local Criminals

Transnational, by its definition, means cross-border; so, when we talk about global crime, we’re talking about transnational crime. One could argue that globalization (the buzzword of the late 20th century), by its very presence, increases any cross-border connection: crime included. Regardless of the transnational nature of the crime, it is committed by an individual in a state, in a municipality, in a town. We typically divide global crimes and global solutions from local crimes and local solutions. But this framework obscures who has the power and who is the administrator of justice (Ullrich, 2016).

Indeed, organized transnational crime is often linked to specific opportunities in the local setting that is exploited by individuals embedded in legitimate business networks (Kleemans and dePoot, 2008). Organized crime can focus on these individuals as networks or on the criminal activities themselves. “Criminal groups are dynamic entities, not static ones. As such, they change with the nature of the criminal acts they commit” (Albini, 1971, 49). Organizing crime based on family relationships or friendships may lead to different outcomes than crimes based on ideological objectives, lie a terrorist group.

References
Albini, Joseph L. 1971. The American Mafia. New York: Irvington Publishers.

Arquilla, John. 2010. “The New Rules of War.” Foreign Policy. February 11. Online.

Arquilla, John, and David Ronfeldt. 2001. Networks and Netwars. Santa Barbara: RAND Corporation.

Bergeron, James. 2013. “Transnational Organised Crime and International Security.” The RUSI Journal, vol. 158, iss. 2.

Bjelopera, Jerome P., and Kristin M. Finklea. 2012. “Organized Crime: An Evolving Challenge for U.S. Law Enforcement.” Washington, DC: Congressional Research Service. pdf. available at: fas.org/sgp/crs/misc/R41547.pdf

Bunker, Robert J. 2010. “Strategic Threat: Narcos and Narcotics Overview.” Small Wars and Insurgencies, vol. 21, iss. 1.

Bybee, Ashley Neese. 2012. “The Twenty-First Century Expansion of the Transnational Drug Trade in Africa.” Journal of International Affairs, vol. 66, iss. 1.

Calderoni, Francesco. 2015. “The Analysis and Containment of Organized Crime and Transnational Organized Crime: An Interview with Ernesto U. Savona.” Trends in Organized Crime, vol. 18, iss. 1-2.

Kleemans, Edward R., and Christianne J. de Poot. 2008. “Criminal Careers in Organized Crime and Social Opportunity Structure.” European Journal of Criminology, vol. 5, iss. 1.

Leech, Garry. 2011. The FARC: The Longest Insurgency. New York: Zed Books.

Makarenko, Tamara, and Michael Mesquita. 2014. “Categorising the crime-terror nexus in the European Union.” Global Crime, vol. 15, iss. 3-4.

May, Channing. 2017. “The Business of Transnational Crimes.” Global Financial Integrity. April 11. online.

McCarthy, Niall. 2016. “Global Profit From Crime Could Account for 1.5% of Global GDP Each Year.” Forbes. February 29. online.

Obama, Barak. 2011. Strategy to Combat Transnational Organized Crime. Washington, DC: The White House. July. pdf.

Pascual, Al, Kyle Marchini, and Sarah Miller. 2018. “2018 Identity Fraud: Fraud Enters a New Era of Complexity.” Pleasanton, CA: Javelin Strategy. pdf.

Rollins, John, Liana Sun Wyler, and Seth Rosen. 2010. “International Terrorism and Transnational Crime: Security Threats, U.S. Policy, and Considerations for Congress.” Washington, DC: Congressional Research Service. pdf.

Stoica, Ionel. 2016. “Transnational Organized Crime: An (Inter)National Security Perspective.” Journal of Defense Resources Management, vol. 7, iss. 2.

Ullrich, Leila. 2016. “Beyond the Global-Local Divide.” Journal of International Criminal Justice, vol. 14, iss. 3.

United Nations Office on Drugs and Crime. 2018. “Global Overview of Drug Demand and Supply: Latest Trends, Cross-Cutting Issues.” New York: United Nations.

Wagley, John R. 2006. “Transnational Organized Crime: Principal Threats and US Responses.” Washington, DC: Congressional Research Service. pdf.

Discussion Questions: How is narcocrime different from other kinds of crime? When is crime a global concern? When is it a local one? And what is the difference?

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